A challenging opportunity

Green hydrogen is the fuel of the future, a pathbreaking technology that can lead the world towards energy security. It has zero-emissions and is an attractive alternative to the traditional pollution-causing carbon-emitting fossil fuels.

According to Rystad Energy, world’s leading consultancy in the energy industry, over 30 countries have released their hydrogen roadmaps, and countries like Germany, China, and the United States have already made significant strides in developing green hydrogen ecosystems, with the establishment of robust supply chains and production facilities. China has the highest number of green hydrogen gas (GH2) fuelling stations for road vehicles in the world, and is closely followed by Japan and South Korea. As per the BRINK report 2022, Germany has positioned itself as a pioneer in the field of green hydrogen technology and has earmarked USD 220 billion in investments by 2026. It is offering incentives to indigenous companies and is channelising international investments through global green hydrogen networks with countries like Brazil, Chile, Mexico, South Africa, Vietnam, etc.

At the Glasgow COP26, India declared its ambitious target of becoming a net-zero emitter by 2070, and aims to increase its non-fossil fuel energy capacity to 500 gigawatts (GW) by 2030. GH2 energy is vital for India to achieve its Nationally Determined Contribution (NDC) objectives to ensure energy security. As a country, it has the potential to lead emerging economies in clean energy transition, through its advancements in green hydrogen technology. Already, a significant number of companies are exploring its potential and setting up pilot projects.

Currently, the production of green hydrogen is less than 1 per cent whilst 95 per cent of total hydrogen produced in India is “grey hydrogen”, a dirtier form of hydrogen production which releases greenhouse gases into the atmosphere. Therefore, the Indian government launched the National Green Hydrogen Mission in 2023, which aims to make India a global hub for producing green hydrogen and fuel-cell vehicles. The mission has a budgetary allocation of Rs 19,744 crore, with a target of attaining 10 per cent hydrogen blending in the natural gas grid by 2030, which would increase to 25 per cent by 2035. The Ministry of Ports, Shipping, and Waterways is striving to establish green hydrogen bunkering facilities at the 12 major ports of India by 2035. This will be achieved through the setting up of 100 GW of electrolyser capacity, with an annual output of 5 million metric tonnes (MMT).

According to the World Energy Outlook Report 2022, India’s fossil fuel requirement will be reaching its peak by the year 2040, and in order to meet the country's net zero objectives, industrial GH2 generation has to reach 7 MMTPA by 2040 and 114 MMTPA by 2070.

India’s public and private sectors have taken the first steps and forayed in the transition of the country’s G𝐻 2 economy. Oil India Limited (OIL), a public sector undertaking, has commissioned India’s first 99.99 per cent pure G𝐻 2 pilot plant, with an installed capacity of 10 kg per day in Jorhat, Assam, in April 2022. The state of Gujarat is determined to become India's green hydrogen manufacturing hub, targeting a production capacity of 8 MTPA by 2035. It has signed MoUs with major corporations like Reliance, Adani, ArcelorMittal, and Torrent, for significant investments in green energy projects. The Himachal Pradesh government has also signed a MoU with Oil India Ltd (OIL) for promoting green hydrogen production. A few government-funded institutions — such as the National Thermal Power Corporation (NTPC) in Leh, Ladakh, and the National Chemical Laboratory in Pune, Maharashtra — are also preparing to introduce hydrogen fuel buses by the end of this year. The Indian Railways is currently in the planning stages of operating 35 hydrogen-powered trains at several heritage and hill stations located in the north-eastern region. Prominent private corporations like RIL, Adani, Tata, JSW, L&T, and key energy enterprises like Hindustan Petroleum Corporation Limited (HPCL), and ONGC have undertaken the responsibility of developing India's hydrogen ecosystem. The development of GH2 infrastructure in India is still in its early stages, but the increasing investments and plans for further growth in the sector signify a shift towards clean energy.

India’s renewable energy dilemma

The Indian government, in 2015, had set an aim of generating 175 gigawatts (GW) of renewable energy by December 2022, of which 100 GW is expected to come from solar power, 60 GW from wind power, 10 GW from small hydropower, and 5GW from biomass-based power. However, as per the Central Electricity Authority’s (CEA’s) April 2023 report, India missed its renewable energy target by 31 per cent. The report attributed the deficit in renewable energy capacity to factors such as the COVID-19 pandemic, land acquisition complications, delays in payment to power producers, and an inadequate supply of domestically manufactured solar panels.

G𝐻 2 has the potential to overcome India’s renewable energy challenges. Heavy industries like steel, cement, and chemicals are highly dependent on fossil fuels. As per the International Energy Agency (IEA) estimates, India’s total emissions from energy use in 2021 were 2,551 MtCO2 (metric tons of carbon dioxide), and the share of these industries in the total emissions was 29 per cent. Therefore, GH2 can play a critical role in India's efforts to decarbonise its energy intensive economic sectors.

However, there are several challenges that the country is facing in its quest for green hydrogen energy. Currently, the production of G𝐻 2 is costlier than conventional hydrogen. As per different market surveys, the production cost of G𝐻2 is between Rs 550 to 600 per kg, which is too expensive for large-scale manufacturing. In order to become a commercially viable option, the price must fall by 70 to 80 per cent.

The infrastructure for refuelling and pipeline networks for transporting green hydrogen is almost non-existent, which is one of the reasons for the limited adoption of GH2. The government is endeavouring to replace 15 per cent of their fuel volume in urban gas distribution networks with GH2 by 2035.

The major challenge for the adoption of green hydrogen technology is the availability of water. According to International Energy Agency (IEA) estimates, the production of one kilogram of green hydrogen, utilising solar energy as the electricity source for electrolysis, requires an estimated water consumption of approximately 32 litres. To meet the 5 MMT G𝐻 2 production target by 2030, India would require 50 billion litres of water. However, according to the Central Ground Water Board (CGWB) report 2021, approximately 38 per cent of districts in India come under critical water stressed zones.

The other cause of concern with G𝐻 2 production is that the electrolysis process requires ‘demineralised’ freshwater for maximum efficiency. In a country like India, where freshwater is scarce and water recycling is still in its nascent stage, the load on the continual freshwater supply may not be able to support the expected goals of G𝐻2 production. According to an Ernst & Young study, India would need almost 50-60 billion litres of fresh water, if the 5 MMT of G𝐻 2 generation goal is to be attained by 2030.

Whether GH2 can lead India’s energy transition or not, would depend on our ability to overcome the challenges of technological adoption, water management, and infrastructure development. Green hydrogen technologies are in their nascent stages and would need robust backing from the state and a collaboration between various stakeholders. GH2 technology has the capacity to lead India’s energy security in an increasingly decarbonising world, where it can balance its green and economic aspirations.

Pradip Burman is Chairman of Mobius Foundation, Delhi; and Arun Kumar Yadav is Research Associate at Mobius Foundation, Delhi. Views expressed are personal